While no one has a perfect crystal ball, the market is performing better than predicted in dry van and reefer heading into Q4.
In the fast-paced and volatile world of freight logistics, market predictions play a critical role in guiding business strategies.
As the North American logistics industry prepared for 2024, leading logistics data platforms FreightWaves and DAT offered forecasts on capacity, volumes, and rates across different freight modes—dry van, reefer, and flatbed.
How We Did It
We’ve looked at a side-by-side analysis of these market forecasts and realities, focusing on capacity, rates, and volumes for the dry van, reefer, and flatbed sectors from FreightWaves and DAT.
If you’re unfamiliar with the term “capacity” – capacity is the number of trucks available in a certain area or shipping lane. The more capacity, typically, rates go down, and the less capacity available, the higher the rates.
Our primary goal is to see which predictions aligned with real-world outcomes and where the market took some unexpected turns.
Dry Van Market – Predictions in Early 2024
FreightWaves
Predicted that the dry van capacity would tighten as smaller carriers exited the market due to lack of available business, potentially resulting in rate increases as the supply/demand balance shifted.
DAT
Predicted moderate growth in demand for dry vans, especially during the peak holiday season, creating a potential for upward rate pressure.
Dry Van Market Current Insights*
FreightWaves
Contrary to predictions, the dry van capacity expanded as smaller carriers re-entered the market. This caused rates to remain flat despite the increase in demand for dry vans.
DAT
The dry van load-to-truck ratios are currently 3.4, which is above the long-term average (approximately 3.0), but rates have remained flat yet remain $0.03/mile higher than the long-term average for this time of year. Despite increased shipping needs, particularly during the early peak season, capacity is balanced.
The Bottom Line
While FreightWaves anticipated a tightening of capacity, DAT’s forecast of increasing demand proved more accurate. However, rates did not rise as expected, due to the additional carriers entering the market.
Reefer Market – Predictions in Early 2024
FreightWaves
Predicted reefer demand would grow significantly, mostly driven by increased consumer spending on perishables. FreightWaves suggested that the capacity would tighten, causing rate increases.
DAT
Predicted modest growth in reefer demand during peak seasons and upward rate pressure by the end of 2024.
Current Insights
FreightWaves
Reefer markets are seeing mixed performance. Some regions have seen spot market rates decline due to excess capacity and weather phenomenon. However, some areas, like the Pacific Northwest, have experienced higher demand causing a slight increase in the rates.
DAT
Reefer volumes have increased in certain lanes, but this hasn’t translated into significant rate hikes. Currently, the truck to load ratio is 6, which is slightly above the long-term average of 5.5. Rates seem to have plateaued as capacity remains mostly even to demand.
The Bottom Line
Both FreightWaves and DAT correctly predicted reefer volume growth, but neither fully anticipated that capacity would remain even to demand, preventing any significant rate increases.
Flatbed Market – Predictions in Early 2024
FreightWaves
Suggested that flatbed demand would remain weak, driven by reduced industrial activity and softness in the housing and construction industries.
DAT
Predicted lower flatbed volumes and rates due to reduced infrastructure spending and a slow recovery in industrial sectors.
Current Insights
FreightWaves
Flatbed demand and rates continue to decline, as the industrial sector and housing markets face an ongoing struggle to recover.
DAT
Flatbed volumes remain weak around 9.8 truck to load ratio, with extremely low demand in construction and industrial projects. Typically, high season and high demand ratio can be anywhere from 11.0 to 18.0. Rates are flat due to some capacity issues in the Southeast.
The Bottom Line
Both FreightWaves and DAT accurately predicted ongoing softness in flatbed volumes, with industrial and construction markets underperforming. Predictions of rate declines were accurate, as both sources report weak demand putting downward pressure on flatbed rates.
Putting It All Together
What is clear here is that while no one has a perfect crystal ball, the market is performing better than predicted in dry van and reefer heading into Q4. Capacity and rate trends were more stable than expected. The logistics industry can be unpredictable, but the important insights DAT and FreightWaves provide help businesses plan a flexible and agile logistics strategy.
Are you ready for 2025?
As we approach the fourth quarter, you may be making your own predictions and gathering information to prepare for a successful start to 2025.
If your plans involve connecting legacy systems with your current technology stack, implementing custom API solutions, or other data integration needs, Kleinschmidt is here to assist with planning and implementation.
*Please note data was pulled in September 2024.
